HSBC set to invest in Iraqi bank

HSBC to buy a majority stake in Iraqi Dar Es Salaam Investment bank.

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By  Rhys Jones Published  May 31, 2005

Global banking giant HSBC is in talks to buy a majority stake in Iraqi bank Dar Es Salaam Investment bank. “HSBC is committed to playing its part in the reconstruction of Iraq and to investing in the country in the long-term,” said a HSBC spokesman. “In partnering with Dar Es Salaam Investment Bank, HSBC believes that it can create a leading personal and commercial banking service,” he added. The deal, which must be approved by the Central Bank of Iraq and by the board of Dar Es Salaam, could be completed by July. HSBC is currently in talks about buying a 51% stake in the Iraqi company from the Khudairy family. A private bank established in 1999, Dar Es Salaam has 14 branches in Iraq, eight of them in Baghdad, and employs 450 staff. HSBC was one of three foreign banks given permission last year to start trading in Iraq. However, high levels of violence have so far impeded the development of the banking system. Foreign banks were banned from Iraq under Saddam Hussein although a number of private banks were licensed to operate. With operations in Bahrain, Jordan, Kuwait, Lebanon, Oman and Qatar and the Palestine Authority, HSBC claims to be the largest international banking group operating in the Middle East.

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